Dive Brief:
- Solar ingot and wafer manufacturers can qualify for the 48D Advanced Manufacturing Investment Credit, or CHIPS ITC, according to final guidance released by the U.S. Department of the Treasury on Wednesday.
- Treasury’s guidance confirms that the credit includes “facilities and equipment that produce semiconductors, including the slicing, etching, and bonding of the semiconductor-grade polysilicon used in photovoltaics modules,” the Solar Energy Industry Association said in a news release Tuesday.
- “The White House is wisely addressing the fact that the overwhelming majority of solar panels manufactured in the world are done so by companies in China,” said Danny O’Brien, president of corporate affairs at Qcells, a solar manufacturer working to establish a complete solar supply chain in the U.S. “This virtual monopoly of the clean energy supply chain means the U.S. risks missing out on a huge economic opportunity.”
Dive Insight:
The 25% tax credit can be claimed retroactively, and is available for properties that began construction after CHIPS passed on Aug. 9, 2022, or before 2027. It also applies to properties placed in service after 2022.
“Supply chain accessibility and security remains one of our biggest challenges in the U.S. solar and storage industry,” said Abigail Ross Hopper, SEIA’s president and CEO, in a release. “While the United States is a global leader in module manufacturing, we don’t have any ingot and wafer facilities in operation yet, representing a critical gap in the solar supply chain.”
Hopper said that SEIA has been urging the administration “to use all of the tools at its disposal to support ingot and wafer production” for the last two years, and that the group commends Treasury for taking a “thoughtful” approach to industrial policy.
Speakers at September’s RE+ conference raised the issue of the U.S.’s lack of ingot and wafer production and how a vertically integrated solar supply chain will be necessary to compete with China, which produces over 80% of the world’s modules, cells, wafers and polysilicon.
“The Biden-Harris Administration’s economic agenda is onshoring semiconductor manufacturing and driving U.S. innovation in this critical industry,” said Secretary of the Treasury Janet Yellen in a release.
“The United States does not have ingot and wafer production in operation yet due to manufacturing complexities and the highly specialized equipment needed to create these facilities, making incentives an important part of the equation for wafer producers,” SEIA said. “Since the Inflation Reduction Act passed, there have been 21 gigawatts of wafer announcements and 10 gigawatts of ingot announcements but only 3.3 GW of ingot and wafer capacity is under construction.”
That 3.3 GW under construction is solely the work of Qcells, which has committed $2.5 billion to building its solar supply chain and currently has a factory under construction “that will manufacture 3.3 GW of ingots, wafers, cells, and solar panels,” the company said.
“When its new facility is up and running, Qcells will manufacture a total of 8.4 gigawatts of solar panels – or 16 million solar panels – a year between its Dalton and Cartersville sites,” said Qcells.
Treasury’s final guidance “provides critical certainty for semiconductor and solar manufacturers to make generational investments in communities across the country,” said National Economic Advisor Lael Brainard.
